These Are the ‘4 Walls ‘Of a Budget, According to Rachel Cruze
Written by
Nicole Spector
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Joe Evans
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We don’t learn about it much (if at all) in school, but crafting, sticking to and regularly refreshing a budget is crucial to our financial well-being. There are a few proven ways to go about creating a budget. You could, for example, try the 50/20/30 budget, the zero-based budget, the pay-yourself-first budget, the envelope budget — the list goes on.
Choose a budgeting method that works for you, but no matter which one you implement, you should know about what financial guru Rachel Cruze calls the “Four Walls” of a budget.
“Simply put, the Four Walls are the most basic expenses you need to cover to keep your family going,” Cruze wrote in a blog on Ramsey Solutions.
Here’s a breakdown of each of the Four Walls and some ways to use them to save.
Food
The first of the Four Walls (or, a most basic expense you can’t forego), is food. But let’s not get carried away here, this doesn’t include dining out or ordering delivery.
“When I say food is one of the Four Walls, I need you to hear this loud and clear: Groceries are essential — restaurants are not,” Cruze wrote. “This is coming from someone who loves going out to eat and even grabbing some Chick-fil-A for the family on the way home. But that delicious chicken is a luxury. Going out to my favorite Mexican restaurant on date night with [my husband,] Winston is a luxury.”
Always leave room in your budget for groceries and focus on how you can save on this essential. You could meal plan, buy in bulk, shop in-season and buy generic.
Utilities
We all gotta keep the lights on, the WiFi connected, the hot water running and the stove in working order. Yes, utilities are one of the Four Walls, meaning you must make room in your budget for them.
“One thing to note with utility bills is they often change from month to month,” Cruze wrote. “As you write in a planned amount, budget on the higher side. If the bill’s lower, you can throw the extra money at your current Baby Step (which is the proven plan for saving money, getting out of debt and building true wealth).”
There are always ways to save on utilities and maximize your budget. For example, you can use LED light bulbs, measure your electricity usage and adjust the thermostat a bit.
Shelter
Housing is, of course, an absolute necessity. This is one of the Four Walls, so make sure your budget can cover it.
“‘Shelter’ means paying for rent or your mortgage (plus insurance, property taxes and HOA fees),” Cruze wrote. “A good rule of thumb here is to make sure you don’t spend more than 25% of your take-home pay on this part of the budget. That helps you keep from turning one of your biggest blessings (your home) into a financial burden.”
To save on shelter, consider where you live or want to live, and research housing costs in that area. You might find that you can get a much cheaper house just a few cities over.
Transportation
Even if you live in a super walkable city, you need money for transportation — whether it’s a car or fare for the bus. This is the fourth of the Four Walls of your budget.
“The transportation budget category can include gas, public transportation, routine maintenance — whatever it costs for you to get where you need to go that month,” Cruze wrote.
There are a few ways you can save on transportation. You might want to buy a reliable used car, instead of a flashy new one, for example. Or, if you have the ability, opt for a healthy bike ride instead of the subway.
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